India prepares to bring a cryptocurrency bill during the winter session of the Indian parliament on November 29. It aims to regulate the crypto market.
Crypto Bill for Proposal on November 29
In 2021, news that there will not be a total ban on cryptocurrencies keeps investors happy. The Standing Committee on Finance stated that cryptocurrencies should be regulated and not banned. Investors can treat cryptos as financial assets, say authorities.
Regulations will protect small investors. The bill may bring a ban on private cryptocurrencies and introduce its own central digital asset.
India does not have a sound relationship with the crypto market. The RBI opposed allowing cryptocurrency in the country in 2018. In 2020, they lifted the ban but did not support crypto trading.
Bill on Crypto Usage in India
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2020, upcoming during the Winter Session on November 29, brings jitters to the crypto investors in India.
On November 29, the government will bring legislation on the crypto market. A bill on the crypto sector will help to promote the crypto technology and bring in regulations. Sources say that there will be a ban on its usage as a legal tender.
On November 18, in the Sydney Dialogue, Prime Minister Narendra Modi urged countries to prevent crypto from entering into the wrong hands. Many in the crypto world use cryptocurrencies for money laundering, financing terror, and performing various illicit activities. The crypto market does not have a central regulation and does not reveal the identity of the user. It is very convenient for illegal activities, say authorities.
RBI Governor Shaktikanta Das said that the RBI might pilot a digital currency by 2021. He says that more discussion on the crypto sector may bring clarity to its regulations.
Experts predict that the bill may prohibit private cryptocurrencies and not a total ban on crypto trading. The underlying technology of cryptocurrencies is here to stay, and a few regulations may come into play. It will protect small investors who consider it as a financial asset.
Benefits of Cryptocurrency
Cryptocurrencies are making headlines today with their varying usage. The electronic transfer of money has made cryptocurrency usage higher. Making cross-border payments is cheaper and faster through crypto. Fiat currencies charge higher and are slower.
Various corporates like Visa and PayPal accept crypto tokens as payment. Transactions are faster through crypto payment.
Fiat currencies come under the control of the government, but developers control most cryptocurrencies. Privacy and security are some important features that most investors prefer, which are available in cryptocurrencies.
Though there are various safety issues concerning digital assets, cryptocurrencies play an important role in digital financial technology. New investors enter the crypto sphere, especially as they get the app through PayPal and Visa, which they already possess on their mobile phones.
Panic Among Indian Investors
Indian investors fear that the Indian government may bring a ban on cryptocurrencies. There are more than 15 million crypto investors in India. Their holdings in crypto are more than $5 billion.
However, authorities have made it clear that there will not be a total crypto ban, but there may be a few regulations in the upcoming parliament session.
Experts suggest that investors should not sell their crypto investments in panic. The bill proposal is not clear, and investors should not resort to rash selling, say experts. Even if there is a ban, investors and traders will get time to sell their assets.
Many false claims from advertisements on television have misled new investors. Regulations may control such false claims. Many cryptos lure consumers with currencies showing abnormal profits. The abrupt sharp surge of crypto prices has brought huge profits to many. But the sudden slide has left many bankrupt.
Analysts say that investors should avoid any panic reaction. Exchanges assure nervous clients about the bill. The regulations are necessary to bring a positive flow in the crypto markets.
Bitcoin is the most popular crypto in India. On Tuesday, the crypto market fell sharply with panic selling from investors. The crypto prices are linked with the Indian Rupee, and market prices crashed almost 20% before they recovered on Wednesday.
Cryptocurrencies on the WazirX platform fell lower on the uncertainty surrounding the crypto market in the country. Prices slipped by 15% to 20% on Tuesday. The crypto frenzy is catching up in India, and new investors reacted in anxiety over their crypto investments.
Bitcoin prices fell almost 10% against the Indian currency, falling to 40 lakh rupees on Wednesday. The domestic news in India is driving Bitcoin prices lower. Bitcoin in the foreign exchanges was down by only 0.3%. The number of sellers in the Indian market is higher with few buyers.
Bitcoin was trading at $58,547 on Thursday, November 25. BTC/USD reached life-high levels at $67.766 on November 8.
Ethereum prices trade at $4,460 on Thursday, November 25. ETH/USD touched life-high levels at $4,820 on Thursday, November 8.
However, smaller coins like the Doge have fallen lower to $0.2212 levels. Shiba Inu is at $0.00003881.